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1、Holly K. Walker, CPCMCorporate Learning Solutions and Contract Mgmt. ConsultantIntroduction toCommercial ContractsUnderstanding the BasicsSession #: 310April 16 1:30 2:30 pmCommercial Contracts Contracts help to build relationships between buyers and sellers Contracts attempt to allocate risks and r

2、esponsibilities between the parties The professional purchasing/contract manager can build a bridge between the customer and supplier. The purchasing/contract manager must understand and balance the needs of the contracting partiesElements of a ContractCompetent PartiesConsiderationLawful PurposeCer

3、tainty of TermsOfferAcceptanceContracts- Written Vs. OralA contract is a promise between partiesContracts maybe written or oralIf the following are present on a scrap of paper, or even oral, a contract may exist:The partiesThe goodsTime at which the transaction will occurGaps will be filled in by UC

4、C or UNCISG or civil lawDifferent Legal SystemsCommon LawCivil LawIslamic LawCommunist lawLaws Governing ContractsTHE PARTIES TO AN AGREEMENT ARE, BY MUTUAL CONSENT, usually FREE TO CHANGE THE RESULT OF THE LAW FOR PURPOSES OF THAT AGREEMENT. Uniform Commercial Code United Nations Convention on the

5、International Sale of Goods CSIGFirst Steps- BuyerIdentify Possible NeedsNew service offeringExpand market shareBecome more cost effectiveNext Steps - BuyerIdentify and Analyze RequirementFunctionalPerformanceDesignBuyer: Pre Contract ActivityEstablish evaluation criteriaAttributes of interestPrice/

6、quality/deliveryReputation of sellerStandardsWeightingMatch customer requirements to applications, assess opportunities and prepare to assist the customer in the development of the RFP. Seller: Pre- RFP ActivityReview opportunityReview own capabilitiesAssess and prioritize opportunitiesInfluence des

7、ign of customer RFPReview need for development workProvide input to customer on how your company can provide assistanceCreate necessary third party agreementsPre-Contract Activities- SellerMake Preliminary Bid/No Bid Decision How are we different from competitors Can we make those differences streng

8、ths? How much will it cost to win? What are the risks? Are the potential benefits, worth the costs? Do we have the product portfolio? Can we meet the needs of this customer? Actively participate on the proposal team Identify customer required terms and conditions Identify and assess financial impact

9、 of customer terms and conditions Obtain input from all affected organizations Determine customer acceptance criteria Propose sellers terms and conditions of response- if appropriateDevelop contracts that contain clear deliverables and contractual obligations and standard terms and conditions, while

10、 identifying and mitigating all risks.Contract Formation Contract Formation Prepare negotiation planNegotiate major issuesPrepare draft contractNegotiate minor issuesReview and approve contractObtain contract signatureContract StandardsMost major companies develop standard contract forms, procedures

11、 and clausesThese standards allow contracts to be processed more quickly, cost effectively and with reduced riskStandards also help to assure that agreements entered into are aligned with the companys business objectivesUsual Contentious ClausesPricing and Payment TermsLiquidated Damages/PenaltiesLi

12、ability/Indemnification TermsWarranties Scope and DurationIntellectual Property OwnershipSuccessful Contract NegotiationInvolves thorough preparation and planningEffective team planningSharp negotiation skillsUnderstanding the other partys goalsDocumentation of agreementsEnsure that all contractual

13、obligations are met through communication among all necessary parties; manage contract disputes through negotiation/resolution and review lessons learned throughout performance and at contract completion.Communicate Contract AuthorizationPlan Contract AdministrationManage Contract performanceReview

14、Contract CompletionCommunicate contract authorization and necessary informationCreate contract administration plan and distribute as necessaryContract Obligations MatrixResponsibility Assignment MatrixManage contract performance:Correspondence controlManage contract changesPrepare final acceptance p

15、ackage Ensure all contractual obligations have been metMonitor financial and operational performanceReview contract completionClose-outNoImageNoImageBuyer and Seller: Managing Contract PerformanceAnticipate problems and take appropriate actionObserve performance and progress and resolve problemsManage disputesManage contract changesResolve payment discrepanciesEscalate unresolved disputesConfirm that all contract obligations have been metSources of Risk in Contract

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